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Wednesday, 2 December 1936

Senator UPPILL (South Australia) . - The proposal of the Government to curtail by 40 per cent, the trade with Japan at a time when it was expected that our trade with that country would increase appears to be altogether too drastic. I realize that Great Britain, which takes practically all of our primary products, should receive some consideration in the matter of cotton piece goods. The problem confronting the Government is difficult, particularly as Japan, as our second best customer, would probably expect further trade with Australia owing to our satisfactory trade balance with that country. I have not criticized the Government's trade diversion policy while negotiations are proceeding with Japan, and I do noi- propose to do so now.

On the information at present available, I cannot support the Government's proposal to encourage the manufacture of internal combustion engines in Australia, but I understand that the Government is now awaiting a report from the Tariff Board on the subject. I do not contend that internal combustion engines cannot be manufactured economically in Australia now or at a later date, but in the absence of a proper investigation the proposal should not be proceeded ' with, unless it can be shown that it would be of advantage from a defence viewpoint. We have wisely laid it down as a principle that no new customs duties shall be imposed until reported on by the Tariff Board. The Ottawa agreement provides that no new protective duties shall be imposed or existing duties increased against Great Britain unless recommended by the Tariff Board. I do not know how the Government intends to reconcile these proposals with that portion of the agreement. The manufacture of internal combustion engines is a new undertaking in Australia, and there is nothing to show how the production of complete motor cars in this country will affect the users of motor vehicles. It would have been more satisfactory had inquiry been made by the Tariff Board before these proposals were launched. We should have complete evidence from those with a knowledge of the subject, and a full report and recommendation from, the board. As the matter is not urgent there is no reason why this important undertaking should be undertaken without the usual preliminary investigation. If it be demonstrated to the Tariff Board that the industry can be carried on successfully without increasing the price to the public, I shall be prepared to support the proposal. We should also take into consideration the effect which the new duties will have on the distributing companies. 'It cannot be denied, I think, that they will be adversely affected, and many of those at present employed in assembling and distributing imported motor cars will not be able to find employment in the new manufacturing industry. We should not disturb the exi sting organization tin til we are sure that the manufacturing industry will be a success. It seems clear that not more than two or three firms will be engaged in manufacture, so that competition will not be particularly effective, and the price of cars must rise. It would, of course, be a good thing if we could establish a successful motor manufacturing industry in Australia. I do not pretend to know enough about the matter to be able to say whether or not it is likely to be economically successful, but I do know that we should not rush headlong into a venture of this kind without conducting the fullest investigation. All business people know that a liberal allowance must always be made for unforeseen contingencies. I am not opposing the efforts of the Government to bring about better trade relations with other countries, but I am frankly doubtful regarding the probable success of its proposal to establish a motor manufacturing industry in Australia.

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